Dubai has become, in the last decade, a major international hub for many industries, as a consequence of the establishment of free zones, each dedicated to a specific field of activity. Dubai offers an attractive tax regime, incentives policies, a high quality infrastructure and access to international markets. As such, more investors are drawn to this region for setting up businesses and our lawyers in Dubai can offer them the information they need for setting up onshore companies here.
Opening an onshore company in a free zone in Dubai
If you want to open an onshore company in Dubai, you can set up the business in any of the free zones or outside the free zones, but, according to the United Arab Emirates (UAE) legislation, there is a major difference in terms of ownership rights.
While in the free zones of Dubai any foreign registered company can have a full foreign ownership, in any other regions outside the free zone, this provision is no longer available. As such, companies incorporated outside the Dubai free zones are required to have 51% ownership of a citizen of UAE.
The most recommended option is to incorporate the company in one of the 30 free zones available in Dubai; our law firm can provide you with more details on this matter.
Onshore company in a free zone
The free zones in Dubai are applying an attractive system, with many corporate tax deductions. The main advantages of setting up a business here are the following:
• full foreign ownership;
• no value added tax;
• trade of goods and services is exempted of import/export tax;
• full repatriation of capital;
• no income tax;
• simple and transparent legislation.
An onshore company set in Dubai can rent an office here and be managed from the country of origin of the investor. Also, the UAE legislation provides tax deductions for employees working in an onshore company; our lawyers in Dubai can present to you the conditions that must be fulfilled in order to receive the employee tax deduction.
All companies incorporated in Dubai require a license permit, issued in accordance with the field of activity. As such, you will need one of the three types of licenses:
• commercial trade license – issued for trading activities;
• service license – issued for the service providers;
• industrial license – issued for companies involved in production.
If you need further information on the legislation for onshore companies, please contact our team of lawyers in Dubai, who can offer you legal advice.